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Confusing Economic jargon prevalent in India simplified for you! part-3

Shweta Das Munshi

commerce.wa.gov

Reading Time: 4 minutes

Reduction in the foreign v31) DEVALUATION
Reduction in the foreign value of a domestic currency to discourage imports and promote indigenous exports.
32) BOP – BALANCE OF PAYMENTS
The total difference in value between payments that come into and out of a country over a considerable period of time (over a quarter of a year or more commonly over a year). These transactions can be made by individuals, firms and government bodies.
33) BOT – BALANCE OF TRADE
The total difference in value between a country’s total imports and exports for a considerable time period; it is reflected as part of the BOP in the country’s economic survey.
34) FDI – FOREIGN DIRECT INVESTMENT
The capital value of investment/s made by a company or an individual of a country into the business interests of another country.
35) CAPITAL
The total sum of money invested into a business with the hope to generate a sizeable profit in the future.
36) CALL MONEY
A loan that is given for very short duration (a few days or for a week). It seeks very low rate of interest and is used as a method of generating immediate liquidity.
37) DIRECT TAX
A tax whose burden is borne by the person on whom it is intended for and cannot be shifted. For e.g. Personal income tax, Social Security tax, etc.
38) INDIRECT TAX
A tax that is levied on any goods purchased by a consumer (or an exporter) in which the (consumer) tax payer’s liabilities varies in direct proportion to the quantity of the particular goods being purchased or sold.
39) PROGRESSIVE TAX
When a country’s tax rates increase as the taxable amounts of individuals or businesses increase, it is called progressive.
40) EXCISE TAX/DUTY
Taxes imposed on the manufacture, sale or the consumption of different commodities in a country. For e.g. excise tax on cloth is lower, liquor is higher, and tobacco is highest.
41) VAT – Value Added Tax
An indirect tax levied on goods and services in which the value of the good increases during various stages of production and distribution by the producers, wholesalers, resellers, retailers until it reaches the end-consumer. Petroleum products and alcoholic drinks are taxed separately by State governments under VAT.
42) GST – Goods & Service Tax
An indirect tax (unified tax) which simplifies the VAT tax by splitting India’s indirect tax regime into five fixed tax slabs for collection of tax – 0%, 5%, 12%, 18% and 28%. The tax replaced many existing cascading taxes levied by the Central and State governments of India.
43) CESS
An indirect tax earmarked for a particular purpose, such as education, irrigation, Swacch Bharat campaign, etc.
44) ITC – INPUT TAX CREDIT UNDER GST
While paying GST, a business can reduce the advance tax they have already paid on their total purchases and just pay the balance amount to claim ITC benefits.
45) COMPOSITION SCHEME UNDER GST
Any business with a turnover below Rs. 75 Lakh can pay GST at a fixed rate based on their business turnover. By doing this, they don’t have to file GST forms again and again.
alue of a domestic currency to discourage imports and promote indigenous exports.

The total difference in value between payments that come into and out of a country over a considerable period of time (over a quarter of a year or more commonly over a year). These transactions can be made by individuals, firms and government bodies.

The total difference in value between a country’s total imports and exports for a considerable time period; it is reflected as part of the BOP in the country’s economic survey.

The capital value of investment/s made by a company or an individual of a country into the business interests of another country.

The total sum of money invested into a business with the hope to generate a sizeable profit in the future.

A loan that is given for very short duration (a few days or for a week). It seeks very low rate of interest and is used as a method of generating immediate liquidity.

A tax whose burden is borne by the person on whom it is intended for and cannot be shifted. For e.g. Personal income tax, Social Security tax, etc.

A tax that is levied on any goods purchased by a consumer (or an exporter) in which the (consumer) tax payer’s liabilities varies in direct proportion to the quantity of the particular goods being purchased or sold.

When a country’s tax rates increase as the taxable amounts of individuals or businesses increase, it is called progressive.

Taxes imposed on the manufacture, sale or the consumption of different commodities in a country. For e.g. excise tax on cloth is lower, liquor is higher, and tobacco is highest.

An indirect tax levied on goods and services in which the value of the good increases during various stages of production and distribution by the producers, wholesalers, resellers, retailers until it reaches the end-consumer. Petroleum products and alcoholic drinks are taxed separately by State governments under VAT.

An indirect tax (unified tax) which simplifies the VAT tax by splitting India’s indirect tax regime into five fixed tax slabs for collection of tax – 0%, 5%, 12%, 18% and 28%. The tax replaced many existing cascading taxes levied by the Central and State governments of India.

An indirect tax earmarked for a particular purpose, such as education, irrigation, Swacch Bharat campaign, etc.

While paying GST, a business can reduce the advance tax they have already paid on their total purchases and just pay the balance amount to claim ITC benefits.

Any business with a turnover below Rs. 75 Lakh can pay GST at a fixed rate based on their business turnover. By doing this, they don’t have to file GST forms again and again.

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